Financial statements of Université de Montréal · Notes to the financial statements ..... 5–33...

Financial statements of Université de Montréal

April 30, 2017

Independent auditor’s report .................................................................. 1

Statement of operations and changes in fund balances ............................... 2

Statement of financial position ................................................................ 3

Statement of cash flows ......................................................................... 4

Notes to the financial statements ....................................................... 5–33

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Independent auditor’s report

To the Board Members of Université de Montréal

We have audited the accompanying financial statements of Université de Montréal, which comprise the statement of financial position as at April 30, 2017, and the statements of operations and changes in fund balances and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Université de Montréal as at April 30, 2017, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

September 25, 2017

____________________ 1 CPA auditor, CA, public accountancy permit No. A120628

Université de Montréal Statement of operations and changes in fund balances Year ended April 30, 2017 (Amounts in thousands of dollars)

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Notes

Operating Fund Restricted Fund Capital Assets Fund Endowment Fund Total Funds 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

$ $ $ $ $ $ $ $ $ $Revenue

Grants from the ministère de l’Éducation et de l’Enseignement supérieur 504,009 495,800 11,239 10,647 43,123 42,095 — — 558,371 548,542 Other government grants and contracts 23,328 21,184 113,735 115,958 16,139 18,289 — — 153,202 155,431 Other non-governmental contributions and contracts 2,591 1,210 48,492 47,398 7,072 7,887 — — 58,155 56,495

Tuition fees 130,943 130,968 — — — — — — 130,943 130,968 Student services 11,409 11,769 — — — — — — 11,409 11,769

Physical education and sports centre 14,193 13,851 — — — — — — 14,193 13,851 Ancillary services 23,858 23,203 — — — — — — 23,858 23,203 Investment income 3 5,342 5,796 7,461 5,386 — 586 — — 12,803 11,768 External sales 28,717 28,411 — — — — — — 28,717 28,411 Other revenue 27,782 28,214 — — 129 — — — 27,911 28,214

772,172 760,406 180,927 179,389 66,463 68,857 — — 1,019,562 1,008,652

Expenses Teaching and research 474,718 468,401 137,196 134,775 — — — — 611,914 603,176 Teaching and research support 74,648 73,569 14 31 — — — — 74,662 73,600 Student services 12,819 12,422 2,059 2,773 — — — — 14,878 15,195

Physical education and sports centre 14,592 14,387 — — — — — — 14,592 14,387 Scholarships – graduate programs 8,592 8,576 31,363 31,833 — — — — 39,955 40,409

Community services — — 4,431 5,307 — — — — 4,431 5,307 Administration 56,607 55,141 — — — — — — 56,607 55,141 Facilities management 57,765 56,890 — — — — — — 57,765 56,890 Ancillary services 18,460 17,874 — — — — — — 18,460 17,874

Bad debts on tuition fees 2,036 1,336 — — — — — — 2,036 1,336 Interest on bank overdrafts and bank loans and financial charges 1,135 1,473 — — 1,529 2,029 — — 2,664 3,502

Interest on debt — — — — 24,190 25,400 — — 24,190 25,400 Vacation liability and waiting period given time 838 323 — — — — — — 838 323 Other employee future benefits unallocated (3,869 ) (12,461 ) — — — — — — (3,869 ) (12,461 )

Amortization of capital assets — — — — 88,734 90,109 — — 88,734 90,109 Bond discount amortization — — — — 3 4 — — 3 4 Other contributions and restricted amounts — — 2,590 1,459 3,271 28,211 — — 5,861 29,670

718,341 697,931 177,653 176,178 117,727 145,753 — — 1,013,721 1,019,862 Excess (deficiency) of revenue over expenses before the following items: 53,831 62,475 3,274 3,211 (51,264 ) (76,896 ) — — 5,841 (11,210 ) Change in unrealized fair value of investments 4,410 (3,109 ) — — — (414 ) — — 4,410 (3,523 ) Change in fair value of derivative financial instruments 824 (103 ) — — 3,518 161 — — 4,342 58 Excess (deficiency) of revenue over expenses 59,065 59,263 3,274 3,211 (47,746 ) (77,149 ) — — 14,593 (14,675 )

Fund balances, beginning of year (235,681 ) (86,302 ) 7,069 6,559 165,696 184,423 300,077 301,731 237,161 406,411 Endowments — — — — — — 15,458 14,261 15,458 14,261

Investment income added to endowment capital 3 — — — — — — 5,607 5,017 5,607 5,017 Change in unrealized fair value of investments added to (deducted from)

endowment capital 3 — — — — — — 22,158 (14,576 ) 22,158 (14,576 ) Change in revaluations and other items recognized relating

to benefit plans 224,155 (159,277 ) — — — — — — 224,155 (159,277 ) Interfund transfers 15 (53,935 ) (49,365 ) (3,185 ) (2,701 ) 60,690 58,422 (3,570 ) (6,356 ) — — Fund balances, end of year (6,396 ) (235,681 ) 7,158 7,069 178,640 165,696 339,730 300,077 519,132 237,161

The accompanying notes are an integral part of the financial statements.

Université de Montréal Statement of financial position As at April 30, 2017 (Amounts in thousands of dollars)

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Notes

Operating Fund Restricted Fund Capital Assets Fund Endowment Fund Total Funds 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016

$ $ $ $ $ $ $ $ $ $Assets Current assets Cash — — 31,249 29,537 21,199 10,073 897 893 53,345 40,503 Investments 3 — — 2,489 1,117 — — 22,872 22,400 25,361 23,517 Accounts receivable 4 116,601 108,267 110,787 92,022 167,883 87,143 795 3,312 396,066 290,744 Inventories 4,020 4,126 18 18 — — — — 4,038 4,144

Expenses attributable to the next year 3,856 4,639 270 368 441 438 — — 4,567 5,445 Advances to other funds 5 4,729 * 30,788 * 194,755 * 121,712 * — — — — — —

129,206 147,820 339,568 244,774 189,523 97,654 24,564 26,605 483,377 364,353

Investments 3 — — 2,434 3,699 — — 340,783 294,246 343,217 297,945 Accounts receivable 4 1,042 — 3,405 3,005 847,134 867,207 — — 851,581 870,212 Capital assets 6 — — — — 1,215,263 1,177,691 — — 1,215,263 1,177,691 Deferred costs — — — — 245 418 — — 245 418 Defined benefit pension plan asset 12 336,135 103,308 — — — — — — 336,135 103,308 Other assets — — — — 432 496 — — 432 496

466,383 251,128 345,407 251,478 2,252,597 2,143,466 365,347 320,851 3,230,250 2,814,423

Liabilities Current liabilities Bank overdrafts 44,808 43,017 — — — — — — 44,808 43,017 Bank loans 7 164,950 204,912 — — 43,817 — — — 208,767 204,912

Accounts payable and accrued liabilities 8 81,766 74,817 7,349 6,460 33,349 21,100 214 2,636 122,678 105,013 Deferred revenue 10,877 8,634 10,552 9,133 — — — — 21,429 17,767 Deferred contributions 9 — — 273,098 228,816 368 476 — — 273,466 229,292

Current portion of debt 10 — — — — 39,992 292,670 — — 39,992 292,670 Current portion of capital lease obligations 11 — — — — 525 562 — — 525 562 Advances from other funds 5 — — — — 174,081 * 134,362 * 25,403 * 18,138 * — —

302,401 331,380 290,999 244,409 292,132 449,170 25,617 20,774 711,665 893,233

Grants payable 18,377 7,407 47,250 — — — — — 65,627 7,407 Debt 10 — — — — 594,528 430,132 — — 594,528 430,132 Capital lease obligations 11 — — — — 31,507 32,032 — — 31,507 32,032 Deferred contributions 9 — — — — 282,620 235,711 — — 282,620 235,711 Deferred contributions pertaining to capital assets 9 — — — — 845,727 799,764 — — 845,727 799,764 Accrued defined benefit obligation of complementary retirement program 12 72,572 72,740 — — — — — — 72,572 72,740 Accrued benefit obligation of post-employment benefit plan 12 78,204 73,233 — — — — — — 78,204 73,233 Derivative financial instruments 16 1,225 2,049 — — 27,443 30,961 — — 28,668 33,010

472,779 486,809 338,249 244,409 2,073,957 1,977,770 25,617 20,774 2,711,118 2,577,262

Commitments and contingencies 19 and 20

Fund balances 13 and 14 Invested in capital assets — — — — 134,277 130,735 — — 134,277 130,735 Externally restricted — — — — — — 291,594 248,006 291,594 248,006 Internally restricted 12,250 12,898 7,158 7,069 44,363 34,961 48,136 52,071 111,907 106,999 Revaluation and other items recognized relating to defined benefit plans 335,114 110,959 — — — — — — 335,114 110,959 Deficiency – Defined benefit plans (149,755 ) (153,624 ) — — — — — — (149,755 ) (153,624 ) Deficiency – Operating activities (204,005 ) (205,914 ) — — — — — — (204,005 ) (205,914 )

(6,396 ) (235,681 ) 7,158 7,069 178,640 165,696 339,730 300,077 519,132 237,161 466,383 251,128 345,407 251,478 2,252,597 2,143,466 365,347 320,851 3,230,250 2,814,423

* These items are not shown in the “Total Funds” column as their combined total is zero.

The accompanying notes are an integral part of the financial statements.

From the Board of the University Rector ____________________________________________ Vice-rector of Finance and Infrastructures ____________________________________________

Université de Montréal Statement of cash flows Year ended April 30, 2017 (Amounts in thousands of dollars)

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Notes 2017 2016 $ $ Operating activities Excess (deficiency) of revenue over expenses 14,593 (14,675 ) Adjustments for Change in unrealized fair value of investments (4,410 ) 3,523 Gain on disposal of investments (13,847 ) (13,534 ) Amortization of capital assets 88,734 90,109 (Gain) loss on disposal of capital assets (156 ) 793 Bond discount amortization 3 4 Amortization of deferred contributions pertaining to capital assets (47,814 ) (46,978 ) Change in asset and obligations related to defined benefit plans (3,869 ) (12,461 ) Change in fair value of financial instruments (4,342 ) (58 ) 28,892 6,723 Net changes in non-cash working capital items and long-term accounts receivable 18 73,153 5,360 102,045 12,083 Investing activities Net change in investments (6,701 ) 38,466 Acquisition of capital assets (115,256 ) (97,668 ) Proceed from disposal of capital assets 940 29,558 (121,017 ) (29,644 ) Financing activities Net change in bank loans 3,855 (5,849 ) Increase in debt 204,956 209,936 Repayment of debt and capital lease obligations (293,197 ) (264,636 ) Net change in unamortized issuance costs (606 ) (162 ) Increase in deferred contributions pertaining to capital assets 93,777 60,897 Endowments received 15,458 14,261 Investment income added to endowment capital 5,607 5,017 Net change in deferred costs 173 173 30,023 19,637 Net increase in cash and cash equivalents 11,051 2,076 Cash and cash equivalents, beginning of year (2,514 ) (4,590 ) Cash and cash equivalents, end of year 8,537 (2,514 ) Cash and cash equivalents comprise Cash 53,345 40,503 Bank overdrafts (44,808 ) (43,017 ) 8,537 (2,514 ) Additional information is presented in Note 18. The accompanying notes are an integral part of the financial statements.

Université de Montréal Notes to the financial statements April 30, 2017 (Tables in thousands of dollars)

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1. Status and purpose of Université de Montréal Université de Montréal (the “University”) is incorporated under Act 15-16 Elizabeth II, Chapter 129, promulgated on September 1, 1967 in replacement of its first charter received in 1920 from the Québec Parliament. It is a registered charity, which is not subject to income taxes, within the meaning of the Canadian Income Tax Act. The University offers teaching services and carries on research activities associated with teaching.

2. Accounting policies The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations and reflect the following significant accounting policies:

Consolidation

Not-for-profit entities controlled by the University are not consolidated. The combined financial data of these entities are presented in Note 17.

Fund accounting

The University presents its financial information by fund.

It has an unrestricted fund, the Operating Fund, and three restricted funds: the Restricted Fund, the Capital Assets Fund and the Endowment Fund.

Operating Fund

The Operating Fund records the usual activities carried on by the University in providing teaching, support to teaching and research, operations of the University campus and internal research services. This fund also presents unrestricted external resources and operating grants.

Restricted Fund

The Restricted Fund records externally restricted resources, which are primarily headed to research activities. The surplus generated by activities financed externally are restricted to research or a similar activity and presented as an internal restricted fund in the fund balances.

Capital Assets Fund

The Capital Assets Fund presents assets and liabilities as well as revenues and expenses related to capital assets held by the University and that are used for their financing.

Endowment Fund

The Endowment Fund presents resources received as endowments (permanent capital) as well as investment income that must be added to the endowments, in accordance with the donor’s instructions. Other realized investment income from resources of the Endowment Fund are presented in the Restricted Fund or in the Operating Fund, based on the nature of the restrictions stipulated by the donors, if applicable.


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2. Accounting policies (continued) Revenue recognition

The University follows the deferral method of accounting for contributions. Under this method, restricted contributions for future expenses are deferred and recognized as revenue of the appropriate fund in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue of the Operating Fund when they are received or receivable if the amount receivable can be reasonably estimated and its receipt is reasonably assured.

Contributions received in the form of capital assets are recorded at fair value on the date of the contribution.

Deferred revenue represents receipts for which the services have not been rendered.

The University’s main revenues, other than contributions, are tuition fees, student services, external sales and the recovery of direct costs.

Tuition fees are recognized as revenue of the Operating Fund in the year in which the service underlying the tuition fees is rendered.

Operating grants from the Government of Québec are recorded during the year in which they are incurred.

Contributions received as endowments are presented as direct increases in the balance funds of the Endowment Fund.

Restricted investment income is recognized as revenue of the related fund in the year in which the related restriction expenses are incurred. Therefore, investment income from restricted resources of the Endowment Fund is recognized as revenue of the restricted corresponding fund. If the corresponding expense is not realized, this investment income is deferred and presented as deferred contributions in the statement of financial position. Investment income from unrestricted resources of the Endowment Fund is recognized as revenue of the Operating Fund.

Donations as a result of fund-raising campaigns are recorded to the appropriate fund, based on the donor’s contribution when the donations are received. Unrestricted donations are presented in the Operating Fund in “Other non-governmental contributions and contracts”.

The portion of the revenue received regarding the research contracts, for which services were not rendered during the year, is presented in deferred revenue in the statement of financial position of the Restricted Fund, whereas the portion of other contributions for research and not used at year-end is presented as deferred contributions.

Financial instruments

Financial assets and financial liabilities are initially recognized at fair value when the University becomes a party to the contractual provisions of the financial instrument. Subsequently, all financial instruments are measured at amortized cost, except for investments and derivative financial instruments, which are measured at fair value at the statement of financial position date. Fair value fluctuations, including interest earned, interest accrued, gains and losses realized on disposal are included in investment income. Unrealized gains and losses are presented separately in the statement of operations and changes in fund balances.


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2. Accounting policies (continued) Financial instruments (continued)

Transaction costs related to financial instruments measured at fair value are expensed as incurred. Transaction costs related to the other financial instruments are added to the carrying value of the asset or netted against the carrying value of the liability, and are then recognized over the expected life of the instrument using the straight-line method. Any premium or discount related to an instrument measured at amortized cost is amortized over the expected life of the item using the straight-line method and recognized as income or interest expense.

With respect to financial assets measured at cost or amortized cost, the University recognizes in the statement of operations and changes in fund balances an impairment loss, if any, when it determines that a significant adverse change has occurred during the period in the expected timing or amount of future cash flows. When the extent of impairment of a previously written-down asset decreases and the decrease can be related to an event occurring after the impairment was recognized, the previously recognized impairment loss shall be reversed in the statement of operations and changes in fund balances in the period the reversal occurs.

Derivative financial instruments

The University uses interest rate swap contracts to manage its interest rate risks pertaining to the long-term debt as well as foreign exchange forward contracts to manage its foreign exchange risk pertaining to its currency investments. The University has chosen not to prepare the documentation required to apply hedge accounting.

Consequently, interest rate swap contracts are recognized at fair value in the statements of financial position as assets (or liabilities). As at April 30, 2017, the fair value of the interest rate swap contracts is included in “Derivative financial instruments” as liabilities and the fair value of foreign exchange forward contracts is included in investments.

Fair value is determined by using stock market quotes and the prices obtained from financial institutions for identical or similar derivatives.

Capital assets

Capital assets and other assets are recorded at cost and amortized based on their expected useful lives.


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2. Accounting policies (continued) Capital assets (continued)

Amortization is recorded as an expense in the statement of operations and changes in fund balance of the Capital Assets Fund using the straight-line method and over the following terms, in accordance with the ministère de l’Éducation et de l’Enseignement supérieur (MEES) guidelines:

Land improvements 10 and 20 years Buildings Buildings 20, 40 or 50 years Major improvements to buildings 25, 30 or 40 years Buildings under capital lease term of the lease Leasehold improvements term of the lease Machinery and equipment 3, 5 or 15 years Computer equipment Multimedia communication equipment Office furniture and equipment Specialized teaching and research support equipment 10 years Library documents 10 years Rolling stock 5 years Telecommunication networks 10 years Software – other than initial versions 3 years Computer development 10 years Communication equipment under capital leases term of the lease Specialized teaching equipment under capital leases term of the lease

Interest on temporary loans for new construction is added to the cost of this construction until its commissioning.

Capital assets that are fully amortized are written off as soon as they are no longer being used.

Translation of foreign currencies

Account balances and transactions carried out in foreign currencies are translated into Canadian dollars using the temporal method. Under this method, monetary assets and liabilities and those recorded at fair value denominated in foreign currencies are translated into Canadian dollars at the exchange rate in effect at year-end, while non-monetary assets and liabilities are translated at historical exchange rates. Revenue and expenses are translated at the average rate in effect during the year, except for amortization, which is translated at the historical rates. Foreign exchange gains and losses are included in operations for the year.


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2. Accounting policies (continued) Pension plan and post-employment benefit plan

The University uses the immediate recognition approach regarding the accounting of the pension plan and the post-employment benefit plan.

The cost of the University’s defined benefit pension plan and post-employment benefit plan are determined periodically by independent actuaries. The University has chosen to evaluate the accrued benefit obligations by using the actuarial valuation for funding purposes. This periodic actuarial valuation is based on the method of allocating defined benefit on prorated services (which incorporates management’s best estimate of future salary levels, other cost growth, retirement age of employees and other actuarial factors). For the purpose of calculating the real rate of return on plan assets, those assets are valued at fair value. The post-employment benefit plan is not capitalized.

The University uses the immediate recognition approach by which the University recognizes:

‒ in the statement of financial position, the accrued benefit obligations, reduced by the fair value of plan assets and adjusted for any valuation allowance (either the defined benefit asset or the accrued benefit obligation);

‒ in the statement of operations, the cost of the plan for the year;

‒ in the statement of changes in fund balances, revaluations and other items arising in particular from the difference between the actual return on plan assets and the return calculated using the discount rate determined from actuarial gains and losses, past services, settlement, compression and asset ceiling for defined benefit.

Use of estimates

The preparation of these financial statements requires that the University’s management formulate and propose estimates and assumptions that influence the amounts presented in the assets and liabilities and the contingent liabilities disclosed, at the date of the financial statements, as well as the amounts presented in the revenue and expenses of the subject year. Among the major components of the financial statements that require management to make estimates are the grants receivable from MEES, the fair value of the financial instruments, the estimated useful lives of capital assets, the accrued liabilities, the defined benefit asset or accrued benefit obligations and the liabilities within the legal contingencies. Actual results may differ from the estimated amounts.


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3. Investments 2017

Operating

Fund Restricted

Fund

Capital Assets

Fund Endowment

Fund Total $ $ $ $ $ Cash and fund units – money market — 1,159 — 22,872 24,031 Strippable coupons and Canadian

bonds, nominal value of $5,066,100, 3.75% to 5.00%, maturing from August 2017 to June 2021 — 3,739 — 1,424 5,163

Bond mutual fund units Canada — — — 110,652 110,652 Equity Canada — 24 — 75,698 75,722 United States — — — 23,209 23,209 Foreign — — — 21,935 21,935 — 24 — 120,842 120,866 Interests in limited partnerships Foreign — — — 75,413 75,413 Investments in limited partnerships Canada — 1 — — 1 Real estate securities — — — 6,953 6,953 Exchange forward contracts — — — (444 ) (444 ) Funds coverage Foreign — — — 25,943 25,943 — 4,923 — 363,655 368,578 Less: current portion — (2,489 ) — (22,872 ) (25,361 ) — 2,434 — 340,783 343,217


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3. Investments (continued) 2016

Operating

Fund Restricted

Fund

Capital Assets

Fund Endowment

Fund Total $ $ $ $ $ Cash and fund units – money market — — — 20,539 20,539 Mortgage-backed Canadian securities, nominal value of $5,485,000, 1.40% to 2.30%, maturing from June 2016 to July 2056 — — — 3,030 3,030 Strippable coupons and Canadian bonds, nominal value of $67,294,000, 0.25% to 5.00%, maturing from May 2016 to December 2047 — 4,805 — 65,143 69,948 Bond mutual fund units Canada — — — 33,407 33,407 Equity Canada — 10 — 65,687 65,697 United States — — — 21,425 21,425 Foreign — — — 15,879 15,879 — 10 — 102,991 103,001 Interests in limited partnerships Foreign — — — 64,630 64,630 Investments in limited partnerships Canada — 1 — — 1 Foreign — — — 891 891 — 1 — 891 892 Real estate securities — — — 6,769 6,769 Exchange forward contracts — — — 525 525 Funds coverage Foreign — — — 18,721 18,721 — 4,816 — 316,646 321,462 Less: current portion — (1,117 ) — (22,400 ) (23,517 ) — 3,699 — 294,246 297,945


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3. Investments (continued) Investment income is detailed and broken down as follows:

2017

Operating

Fund Restricted

Fund

Capital Assets

Fund Total $ $ $ $ Interest and dividends 919 79 — 998 Investment income earned on resources from Endowment Fund 4,423 10,604 — 15,027 Change in “Deferred contributions” — (3,222 ) — (3,222 ) 5,342 7,461 — 12,803

2016

Operating

Fund Restricted

Fund

Capital Assets

Fund Total $ $ $ $ Interest and dividends 997 60 586 1,643 Investment income earned on resources from Endowment Fund 4,799 10,763 — 15,562 Investment income earned on resources from the Endowment Fund – prior years adjustment — (67 ) — (67 ) Change in “Deferred contributions” — (5,370 ) — (5,370 ) 5,796 5,386 586 11,768


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3. Investments (continued) Investment income earned on resources from the Endowment Fund are detailed and broken down as follows:

2017 2016 $ $ Interest and dividends 7,799 7,991 Gain on disposal of investments 13,847 13,534 21,646 21,525 Trustee and investment managers’ fees (1,012 ) (1,013 ) 20,634 20,512 Portion presented under “Investment income” of the Operating Fund 4,423 4,799 Portion presented under “Investment income” of the Restricted Fund 10,604 10,763 Portion presented under “Investment income” of the Restricted Fund for prior years adjustment — (67 ) Investment income added to endowment capital 5,607 5,017 20,634 20,512 Most endowments are subject to the management and distribution Policy 10.33 of the Endowment Fund (the “Policy”), which annually determines the amount of investment income to be allocated to the various funds. If the fair value (FV) of each endowment is greater than the initial capital provided (ICP), projected revenues must be registered in each respective fund according to the formula based on the “FV/ICP” ratio. If investment income for the year is insufficient, the University must draw on income from previous years included in the fund balances of the Endowment Fund as a temporary reserve. If the temporary reserve is insufficient, part of the change in unrealized fair value of resources held by the Endowment Fund is then used to meet the exact amount of the distribution established under the Policy.

The change in unrealized fair value on resources from the Endowment Fund totals a positive amount of $26,568,000 (negative amount of $17,685,000 in 2016) and is broken down as follows:

2017 2016 $ $ Portion presented in the statement of operations of the Operating Fund and transferred to the Endowment Fund 4,410 (3,109 ) Portion presented directly as a change in the fund balances of the Endowment Fund 22,158 (14,576 ) 26,568 (17,685 )


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4. Accounts receivable Accounts receivable are broken down as follows based on the funds and current and long-term portions:

2017 2016 $ $ Operating Fund Grant receivable from MEES 93,780 84,731 Tuition fees and other fees 11,955 13,393 Sales and other 16,375 14,284 Interest and dividends 5 4 122,115 112,412 Provision for bad debt (4,472 ) (4,145 ) Less: amount receivable in more than one year (1,042 ) — Current portion receivable 116,601 108,267 Restricted Fund Grants, contracts and other 114,192 95,027 Less: amounts receivable in more than one year (3,405 ) (3,005 ) Current portion receivable 110,787 92,022 Capital Assets Fund Grants 1,009,689 951,655 Interests and dividends 165 32 Other 5,163 2,663 1,015,017 954,350 Less: grants receivable in more than one year (847,134 ) (867,207 ) Current portion receivable 167,883 87,143 Endowment Fund Interests and dividends 545 2,673 Other 250 639 Current portion receivable 795 3,312 Total accounts receivable cashable within one year 396,066 290,744 Total accounts receivable cashable in more than one year 851,581 870,212

Donations receivable

The donations receivable from the subscription campaigns for an amount of $60,337,100 ($49,985,400 in 2016) are pledged commitments and are not recorded in the statement of financial position. The estimated realizable value of these commitments is $58,621,200 ($48,728,300 in 2016), of which $20,052,600 ($17,764,300 in 2016) during the following year, and is based on the collection history.


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5. Advances to (from) other funds The University manages all its bank accounts globally. Although most of the deposits attributed to each fund are applied to the bank account of the fund in question, disbursements pass through a central bank account presented in the Operating Fund. Advances to or from other funds are non-interest bearing and do not include terms of repayment (or reimbursement).

6. Capital assets

2017

Cost Accumulated amortization

Net book value

$ $ $ Land 41,423 — 41,423 Land improvements 15,802 6,668 9,134 Buildings Buildings 654,242 348,150 306,092 Major improvements to buildings 605,043 177,016 428,027 Building under capital lease 34,498 6,325 28,173 Leasehold improvements 20,282 12,425 7,857 Machinery and equipment Computer equipment 32,848 22,846 10,002 Multimedia communication equipment 23,938 20,603 3,335 Office furniture and equipment 26,391 23,929 2,462 Teaching equipment and research support 240,976 141,970 99,006 Library documents 251,204 209,100 42,104 Rolling stock 1,476 837 639 Telecommunication networks 14,358 7,389 6,969 Softwares – other than initial versions 10,535 7,448 3,087 Computer development 100,550 44,508 56,042 Communication equipment under capital leases 10,129 7,135 2,994 Specialized teaching equipment under capital leases 157 102 55 Current projects 164,325 — 164,325 Works of art 3,537 — 3,537 2,251,714 1,036,451 1,215,263


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6. Capital assets (continued)

2016

Cost Accumulated amortization

Net book value

$ $ $ Land 41,410 — 41,410 Land improvements 15,641 5,725 9,916 Buildings Buildings 654,272 336,348 317,924 Major improvements to buildings 567,353 157,224 410,129 Building under capital lease 34,498 5,175 29,323 Leasehold improvements 20,222 10,478 9,744 Machinery and equipment Computer equipment 39,311 28,192 11,119 Multimedia communication equipment 23,916 20,499 3,417 Office furniture and equipment 26,068 22,943 3,125 Teaching equipment and research support 250,744 150,018 100,726 Library documents 241,844 200,701 41,143 Rolling stock 1,462 681 781 Telecommunication networks 15,017 6,779 8,238 Softwares – other than initial versions 11,988 7,057 4,931 Computer development 99,111 34,525 64,586 Communication equipment under capital leases 10,722 6,212 4,510 Specialized teaching equipment under capital leases 157 86 71 Current projects 113,206 — 113,206 Works of art 3,392 — 3,392 2,170,334 992,643 1,177,691 Interest capitalized during the year amounts to $167,870 ($524,512 in 2016).


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7. Bank loans

2017 2016 $ $ Operating Fund Bank credit facilities*, 0.89% to 2.20% (0.98% to 2.20% in 2016) 64,950 79,934 Promissory notes, 0.95% (1.00% in 2016) renewable in May 2017 100,000 124,978 164,950 204,912 Capital Assets Fund Promissory note, 0.95%, renewable in May 2017 43,817 — 208,767 204,912 * The University has authorized bank credit facilities of $275,000,000, namely $10,000,000 in

the form of a line of credit and $265,000,000 in bankers’ acceptances. The line of credit bears interest at the lending institution’s preferred rate minus 0.50 point (2.20% as at April 30, 2017; 2.20% as at April 30, 2016) and is renewable on October 1, 2017, whereas the bankers’ acceptances are issued at the market rate. As at April 30, 2017, the line of credit was not used (nil as at April 30, 2016). The credit facilities are renewable on October 1, 2017.

8. Accounts payable and accrued liabilities

2017 2016 $ $ Accounts payable and accrued liabilities 66,131 52,860 Salaries and employee benefits 14,076 10,763 Accumulated vacation of staff and unpaid leave to be remitted in time 35,318 34,480 Government remittances 7,153 6,910 122,678 105,013


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9. Deferred contributions Deferred contributions

Deferred contributions relate to amounts that have not yet been used for the purposes designated by the fund contributors.

2017

Restricted

Fund Capital

Assets Fund Total $ $ $ Balance, beginning of year (short-term and long-term) 228,816 236,187 465,003 Grants received during the year 185,734 156,788 342,522 Donations received during the year 15,450 2,440 17,890 Restricted investment income for the year 10,695 — 10,695 Amount recognized as revenue during the year (167,597 ) (18,650 ) (186,247 ) Amount transferred as deferred contributions pertaining to capital assets — (93,777 ) (93,777 ) Balance, end of year (short-term and long-term) 273,098 282,988 556,086

2016

Restricted

Fund Capital

Assets Fund Total $ $ $ Balance, beginning of year (short-term and long-term) 219,615 240,283 459,898 Grants received during the year 151,293 54,945 206,238 Donations received during the year 12,794 2,649 15,443 Restricted investment income for the year 10,756 586 11,342 Amount recognized as revenue during the year (165,642 ) (1,379 ) (167,021 ) Amount transferred as deferred contributions pertaining to capital assets — (60,897 ) (60,897 ) Balance, end of year (short-term and long-term) 228,816 236,187 465,003

Deferred contributions pertaining to capital assets

Deferred contributions pertaining to capital assets relate to the restricted contributions for the acquisition of capital assets and represent the unamortized portion at year-end.

2017 2016 $ $ Balance, beginning of year 799,764 785,845 Amount transferred from deferred contributions 93,777 60,897 Amount recognized as revenue during the year (47,814 ) (46,978 ) Balance, end of year 845,727 799,764


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10. Debt 2017 2016 $ $ Bonds Series 23D, 4.5000%, matured March 8, 2017 — 2,627 Unamortized discounts on bonds — (3 ) — 2,624 Loans financed by the MEES Loan for the residences, 6.8750%, repayable in blended

monthly instalments of $25,000, capital and interest, maturing on February 1, 2021 1,004 1,226

Loan, 3.3505%, interest payable semi-annually, principal

repayable in annual instalments of $955,720, matured on June 2, 2016 — 15,221


repayable in annual instalments of $4,234,160, matured on December 1, 2016 — 67,829


repayable in annual instalments of $6,660,499, matured on April 25, 2017 — 88,698






repayable in annual instalments of $781,156, matured on April 25, 2017 — 3,875


repayable in annual instalments of $9,283,661, the balance of $92,581,696 payable at maturity on May 29, 2019 111,149 120,433

Amounts to be carried forward 112,153 353,205


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10. Debt (continued)

2017 2016 $ $ Loans financed by the MEES (continued) Amounts carried forward 112,153 353,205 Loan, 2.2220%, interest payable semi-annually, principal

repayable in annual instalments of $661,200, the balance of $2,355,200 payable at maturity on June 1, 2018 3,016 3,678

Loan, 2.9760%, interest payable annually, principal repayable

in annual variable instalments of $257,897 to $298,626, maturing on December 20, 2022 1,667 1,918


repayable in annual instalments of $1,800,000, the balance of $10,800,000 payable at maturity on June 1, 2034 41,400 43,200


repayable in annual instalments of $5,227,600, the balance of $15,041,200 payable at maturity on March 1, 2029 72,545 77,772


repayable in annual instalments of $443,200, the balance of $795,200 payable at maturity on March 1, 2030 6,114 6,557


repayable in annual instalments of $1,480,000, the balance of $10,360,000 payable at maturity on June 1, 2034 35,520 37,000


repayable in annual instalments of $7,316,856, the balance of $23,098,863 payable at maturity on March 1, 2023 59,683 67,000


repayable in annual instalments of $8,817,251, the balance of $95,674,739 payable at maturity on September 1, 2026 175,030 —



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2017 2016 $ $ Loans financed by the MEES (continued) Amounts carried forward 507,128 590,330 Loan, 2.7530%, interest payable semi-annually, principal

repayable in annual instalments of $105,080, the balance of $105,880 payable at maturity on September 1, 2032 1,577 —

Loan, 2.3640%, principal and interest repayable in annual

instalments of $606,836, maturing on June 1, 2026 5,349 — 514,054 590,330 Unamortized issuance costs (2,784 ) (2,178 ) 511,270 588,152 Other loans Loan for renovation and redevelopment work and for the

construction of new pavilions, bearing interest at the average quarterly interest rate of bankers’ acceptances (effective rate of 0.940% as at April 30, 2017; 0.900% as at April 30, 2016) plus stamping fees fixed at 0,770%, repayable in quarterly instalments of $1,705,953, principal and interest, maturing October 1, 2035, financed by the Operating Fund* 76,503 78,705

Loan, interest rate of 1.250%, repayable in monthly

instalments of $187,000, principal and interest calculated over a 25-year amortization period, paid on December 14, 2016, financed by the Operating Fund* — 4,878

Loan for renovation of residences, bearing interest at the

variable indexed rate at CDOR 1 month (effective rate of 0.916% as at April 30, 2017; 0.943% as at April 30, 2016) plus stamping fees fixed at 0.200%, repayable in monthly instalments of $55,281, principal and interest, maturing May 31, 2030, financed by the Operating Fund* 6,176 6,490

Loan for renovation of residences, bearing interest at the

variable indexed rate at CDOR 1 month (effective rate of 0.916% as at April 30, 2017; 0.943% as at April 30, 2016) plus stamping fees fixed at 0.700%, repayable in quarterly instalments of $245,000, principal and interest, maturing March 30, 2020, financed by the Operating Fund* 2,630 3,390



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2017 2016 $ $ Other loans (continued) Amounts carried forward 85,309 93,463 Loan for a land purchase, bearing interest at the average

monthly rate of bankers’ acceptances (effective rate of 1.000% as at April 30, 2016) plus stamping fees fixed at 0.380%, interest payable monthly, principal paid on April 30, 2017, financed by the Operating Fund* — 22,000

Loan for a land purchase, bearing interest at the average

monthly rate of bankers’ acceptances (effective rate of 0.890% as at April 30, 2017) plus stamping fees fixed at 0.380%, interest payable monthly, principal repayable on April 26, 2019, financed by the Operating Fund* 23,000 —

Loan for the purchase of the building located at

3190, rue Sicotte, Saint-Hyacinthe, bearing interest at the average quarterly rate of bankers’ acceptances (effective rate of 0.980% as at April 30, 2016), principal repayable in quarterly instalments of $20,000 plus interest, paid on December 21, 2016, financed by the Operating Fund* — 1,220

Loan for the Cité du Savoir de Laval building, bearing interest

at the variable indexed rate at CDOR 3 months (effective rate of 0.941% as at April 30, 2017; 0.902% as at April 30, 2016), principal and interest payable quarterly, maturing June 1, 2021, financed by the Operating Fund* 14,941 15,343

123,250 132,026 634,520 722,802 Current portion 39,992 292,670 594,528 430,132 * These other loans contain exchange rate contracts presented in Note 16.

Principal payments required over the next five years are as follows:

$ 2018 39,992 2019 65,036 2020 123,250 2021 29,947 2022 42,437


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11. Capital lease obligations

2017 2016 $ $ Obligation related to the rental of dental equipment, implicit

rate of 7.90%, repayable in monthly instalments of $1,389, principal and interest, maturing on January 1, 2021 57 68

Obligation related to the rental of dental equipment, implicit

rate of 7.90%, repayable in monthly instalments of $457, principal and interest, maturing on January 1, 2021 19 22

Obligation related to the rental of printing material, implicit

rate of 2.30%, repayable in quarterly instalments of $27,845, principal and interest, paid on February 17, 2017 — 75

Obligation related to the rental of the building of the

Cité du Savoir de Laval, implicit rate of 7.25%, repayable in monthly instalments of $233,977, principal and interest, maturing on June 1, 2041 31,956 32,429

32,032 32,594 Current portion 525 562 31,507 32,032 Payments required over the next five years are as follows:

Principal Interest Total $ $ $ 2018 525 2,305 2,830 2019 564 2,266 2,830 2020 606 2,224 2,830 2021 651 2,179 2,830 2022 678 2,130 2,808


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12. Defined benefit asset (accrued benefit obligations) Defined benefit asset (accrued benefit obligations) are detailed as follows:

2017 2016 $ $ Defined benefit asset of the pension plan 336,135 103,308 Accrued defined benefit obligation of complementary retirement program (72,572 ) (72,740 ) Post-employment accrued benefit obligations (78,204 ) (73,233 )

(a) Pension plan

The University offers to all of its employees a defined benefit contributory pension plan as well as a complementary program. The benefits of these plans are based on length of service and final years’ earnings. The funds necessary to meet the plans obligations are provided by the participants and the University. Although the University has the obligation to pay a minimum contribution equal to 10.93% of the participants’ salary for the 2017 calendar year (11.4% for calendar year 2016), the University paid an actual contribution of 11.4% for the calendar year 2017 (11.4% for calendar year 2016). This rate does not include benefit payable for the financing of the complementary retirement program of approximately 0.5% of the participants’ salary (0.5% in 2016).

The University evaluates its accrued benefit obligation and the fair value of assets of the plan for purposes of accounting through extrapolation as at April 30 of each year. The most recent actuarial valuation for funding purposes of the plan was performed on December 31, 2015. The data was extrapolated as at April 30, 2017.

Informations on the pension plan are as follows:

2017 2016 $ $ Pension plan: Fair value of the pension assets 3,937,987 3,518,133 Accrued benefit obligations (3,601,852 ) (3,414,825 ) Defined benefit asset recorded 336,135 103,308 Complementary program: Accrued defined benefit obligations and accrued benefit obligation recorded (72,572 ) (72,740 )


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12. Defined benefit asset (accrued benefit obligations) (continued) (a) Pension plan (continued)

Composition of pension plan assets as at December 31:

2017 2016 % % Money market securities 1.3 1.0 Bonds 35.1 31.8 Equity 29.1 30.6 Mutual funds and other investments 34.5 36.6 100.0 100.0

Other information pertaining to the pension plan and complementary program are presented as follows:

2017 2016 $ $ Expense for the year recognized in the statement of operations 46,965 38,814 Contributions paid by the University during the year 54,201 54,226

(b) Post-employment benefit plan

The University has established a post-employment benefit plan for all retired employees.

The University evaluates its accrued benefit obligation for purposes of accounting through extrapolation as at April 30 of each year. Post-employment benefits were subject to a complete evaluation for accounting purposes as at January 1, 2015 and were extrapolated as at April 30, 2017.

The information related to this plan is presented as follows:

2017 2016 $ $ Accrued defined benefit obligations and accrued benefit obligation recorded (78,204 ) (73,233 ) Other information regarding the post-employment benefit plan are presented as follows:

2017 2016 $ $ Expense for the year recognized in the statement of operations 7,835 7,450 Contributions paid by the University during the year 4,468 4,498


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12. Defined benefit asset (accrued benefit obligations) (continued) (c) Assumptions

The University has retained the following significant actuarial assumptions:

2017 2016

Pension plan and

complemen-tary

program

Post-employment benefit plan

Pension plan and

complemen-tary

program

Post-employment benefit plan

% % % % Accrued benefit obligations as at April 30 Discount rate 5.75 5.75 6.00 6.00 Rate of compensation increase 2.75 2.75 2.50 2.50 Rate of health care cost increase — 6.75 — 7.00 Benefit costs for the year ended April 30 Discount rate 6.00 6.00 6.00 6.00 Rate of compensation increase 2.75 2.75 2.50 2.50 Rate of tuition fees increase — 2.00 — 2.00 Rate of health care cost increase — 6.75 — 7.00


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13. Internally and externally restricted fund balances Main categories of externally restricted amounts

2017 2016 $ $ Endowment Fund External endowments from which the income must be used for the purposes specified by the donor and not those related to the Operating Fund 220,828 205,334 External endowments from which the income is related to the operating fund or is used at the discretion of the University 1,933 1,930 Accumulated unrealized gain on investments related to external endowment capital 41,002 18,478 Accumulated investment income added to endowment capital(1) 27,831 22,264 291,594 248,006 (1) Accumulated investment income is presented as an external restriction as a result of

the University’s capitalization protocol that donors subscribe to at the time of the donation. The protocol’s main purpose is to maintain annual temporary reserve revenues to other funds retained for subsequent distribution if the income of subsequent years are lower than the amounts to be allocated.

Main categories of internally restricted amounts

2017 2016 $ $ Operating Fund Research-related internal activities 11,777 12,217 Redevelopment activities for Student Services and the Physical education and sports centre 473 681 12,250 12,898 Restricted Fund Surplus generated on research activities primarily restricted for research purposes identical to those of the initial externally restricted contribution 7,158 7,069 Capital Assets Fund Future capital asset acquisitions (total uninvested reserves of Residences, DGTIC, faculties and Direction des immeubles) 44,363 34,961


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13. Internally and externally restricted fund balances (continued) Main categories of internally restricted amounts (continued)

2017 2016 $ $ Endowment Fund Internal restrictions of which the revenue can be used at the University’s discretion 38,965 46,945 Accumulated unrealized gain on investments related to internal capital endowments 9,171 5,126 48,136 52,071

14. Fund balances, end of year The Operating Fund mainly has two types of activities:

‒ General teaching activities funded from the MEES grant restricted to operations and by tuition fees;

‒ The specific research-related activities funded from internally restricted funds determined by the University’s management.

The University has restricted amounts from its Operating Fund revenue for internal research activities. The internally restricted amounts for research-related activities are included in the internally restricted fund balance of the Operating Fund. In 2017, the internally restricted amount for the year is $21,955,900 ($20,248,800 in 2016). The fund balance restricted to research activities totals $11,777,300 as at April 30, 2017 ($12,217,600 as at April 30, 2016).

The University also restricted amounts from its Operating Fund revenue to create reserves for the amortization of certain capital assets. In 2017, the internally restricted amount for the year is nil (nil in 2016). The fund balance restricted to creating reserves for the amortization of certain capital assets totals $472,800 as at April 30, 2017 ($681,200 as at April 30, 2016).


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15. Interfund transfers

2017

Operating

Fund Restricted

Fund

Capital Assets

Fund Endowment

Fund $ $ $ $ Contributions to the Capital Assets

Fund reserve (18,765 ) — 18,765 — Contributions to the acquisitions of

capital assets and to the debt service (38,740 ) (3,185 ) 41,925 —

Internally restricted endowments (2,130 ) — — 2,130 Recovery of internal restriction 10,366 — — (10,366 ) Transfer of accumulated unrealized

gain of endowments related to operating fund (4,410 ) — — 4,410

Re-capitalized investment income(1) (256 ) — — 256 (53,935 ) (3,185 ) 60,690 (3,570 )

2016

Operating

Fund Restricted

Fund

Capital Assets

Fund Endowment

Fund $ $ $ $ Contributions to the Capital Assets

Fund reserve (14,067 ) — 14,067 — Contributions to the acquisitions of

capital assets and to the debt service (41,654 ) (2,701 ) 44,355 —

Internally restricted endowments (590 ) — — 590 Recovery of internal restriction 4,118 — — (4,118 ) Transfer of accumulated unrealized

gain of endowments related to operating fund 3,109 — — (3,109 )

Re-capitalized investment income(1) (281 ) — — 281 (49,365 ) (2,701 ) 58,422 (6,356 ) (1) Represents the reinvestment (capitalization) of the portion of investment income not

required by the beneficiaries.


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16. Financial instruments Considering its financial assets and liabilities, the University is exposed to the following financial risks:

Market risk

Market risk is the risk of loss that results from fluctuations in equity prices, interest and exchange rates. The University is exposed to market risk from its investing activities. The level of risk to which the University is exposed varies depending on market conditions and the composition of the asset mix. The University manages this risk by applying an investment policy that allows for diversification of investments.

Credit risk

The University grants credit to students in the normal course of its activities and maintains provisions for future bad debt. A significant portion of accounts receivable is comprised of grants receivable from MEES. The University assesses the risk of default for receipt as low.

Foreign exchange risk

This risk arises from the interests held by the University in foreign securities and foreign bonds. The investment policy applied by the Endowment Fund is the tool used to manage this risk. As at April 30, 2017, interests held by the University denominated in foreign currencies amount to fair value of $146,500,000 in Canadian dollars ($121,546,000 as at April 30, 2016). In addition, as at April 30, 2017, the University held forward foreign exchange contracts with a fair value negative of $443,600 (fair value positive of $524,900 as at April 30, 2016). These contracts are listed with the investments of the Endowment Fund.

Interest rate risk

The bond mutual funds in which the University holds interests are made up of fixed-rate interest-bearing bonds. Consequently, changes in the market interest rate will have an impact on the fair value of the interests as well as on bond investments held by the University.

Bonds and loans financed by the MEES are secured, principal and interest, by the assignment and transfer of the MEES grants. Most of the other long-term debt bears interest at a variable rate and is hedged by interest rate swap contracts.

Under these interest rate swap contracts entered into by the University, the University must disburse interest at fixed rates as consideration for variable rates. These interest rate swap contracts have different maturities and are broken down as follows as at April 30, 2017:

a) Operating Fund

Maturity date Nominal amount Pays or receives Fixed rate Variable rate $ %

May 29, 2018 50,000 Pays fixed Receives variable

1.7500 CDOR 1 month

November 18, 2019 50,000 Pays fixed Receives variable

1.8356 CDOR 1 month


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16. Financial instruments (continued) Interest rate risk (continued)

b) Capital Assets Fund

Maturity date Nominal amount Pays or receives Fixed rate Variable rate $ %

April 26, 2019 23,000 Pays fixed Receives variable

1.440 CDOR 1 month +0.02%

March 30, 2020 10,000 Pays fixed Receives variable

7.160 CDOR 1 month +0.70%

June 1, 2021 16,932 Pays fixed Receives variable

4.180 CDOR 3 months

May 31, 2030 9,000 Pays fixed Receives variable

5.500 CDOR 1 month +20 pts

October 1, 2035 105,936 Pays fixed Receives variable

5.130 CDOR 3 months

Consequently, the treasury risks are minimal.

As these interest rate swap contracts were not accounted for under the hedge accounting method, they are recorded in the statement of financial position at fair value. This fair value was determined from information obtained from the financial institutions from which these contracts were negotiated.

Liquidity risk

Liquidity risk is the risk that the University will be unable to meet its financial obligations when due. The University monitors its cash balances and cash flows arising from its activities in order to be able to meet its commitments. As at April 30, 2017, the most significant financial liabilities were as follows: bank overdrafts, bank loans, accounts payable and accrued liabilities, grants payable, debt, capital lease obligations and derivative financial instruments.


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17. Controlled non-profit entities The University controls Fondation universitaire de l’Université de Montréal, Société de développement immobilier de l’Université de Montréal, Presses de l’Université de Montréal and IRICoR.

These entities have not been consolidated in these financial statements. The combined financial data of these entities is as follows:

2017 2016 $ $ Financial position Assets 2,114 1,986 Liabilities 1,719 1,588 Excess of assets over liabilities 395 398 2,114 1,986 Operations Revenue 1,435 1,688 Expenses 1,438 1,639 (Deficiency) excess of revenue over expenses (3 ) 49

18. Additional information to the statement of cash flows Net change in non-cash working capital items and long-term accounts receivable

2017 2016 $ $

Accounts receivable (86,691 ) 20,424 Inventories 106 153 Expenses attributable to the next year 878 (996 ) Accounts payable and accrued liabilities 5,895 (8,966 ) Deferred revenue 3,662 (2,057 ) Grants payable or receivable 58,220 (8,390 ) Deferred contributions 91,083 5,192 73,153 5,360

Non-cash transactions

2017 2016 $ $ Capital assets acquired still in accounts payable and

accrued liabilities 28,903 17,133 Capital assets acquired through capital leases 32,032 32,594


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19. Commitments a) The commitments of the Operating Fund total $323,097,900 with respect to the

Capital Assets Fund, as a contribution for asset acquisitions, as well as renovation projects, redevelopment, expansion and construction of capital assets. This amount is broken down as follows:

Commitments $ Self-financed units 25,969,800 Other units of the Operating Fund 297,128,100

b) The commitments of the Restricted Fund total $733,200 with respect to the Capital Assets Fund, as a contribution for asset acquisitions, as well as renovation projects, redevelopment, expansion and construction of capital assets.

c) The University is bound by different leases for physical space, equipment and computer equipment. The total commitments relating to these contracts amount to $53,725,800. Minimum payments required under these contracts for the next five years are as follows:

$ 2018 15,092,700 2019 13,219,100 2020 8,536,000 2021 7,448,100 2022 6,378,900

d) The University is committed to a financial institution to ensure, in the event of default, a maximum of $1,000,000 in connection with a loan of Presses de l’Université de Montréal, an organization controlled by the University.

e) As at April 30, 2017, the University has agreed to pay by contracts from external suppliers for a total of $247,745,800 through various construction projects, development or system development in progress.

20. Contingencies In the normal course of business, the University is involved in various claims. Although, as at April 30, 2017, the outcome of these outstanding claims cannot be determined with certainty, the University is of the opinion that it will have no significant adverse effect on its financial position, its operations or its cash flows.

21. Comparative figures Certain comparative figures have been reclassified to conform to the current year’s presentation.

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